On Saturday, April 17, 2021, Chris Myers, Air Methods Executive Vice President of Customer Experience, Reimbursement, and Strategic Initiatives, testified before the NCOIL Health Insurance & Long Term Care Issues Committee regarding the NCOIL Model Act regarding Air Ambulance Protections Draft. The following is the complete text of his testimony with presented materials. The hearing can be viewed here on the Committee web page.

Chair Hunter, Vice Chair Ferguson, and Members of the Committee, my name is Chris Myers. I am the Executive Vice President of Reimbursement for Air Methods and I am glad to be back with you today. Thank you for the opportunity to appear before you to continue our discussion on this important topic. Since we last met, there has been a key development that directly affect this Model Act, and how consumers interact with membership products: The No Surprises Act was voted into law and will become effective on January 1, 2022. This law significantly changes the landscape of the U.S. healthcare system and dramatically decreases the financial risk for patients, as it prohibits the practice of balance billing.

To be clear at the outset, I am not here today to argue for the prohibition of memberships but, instead, for the appropriate regulation of them so that consumers are not deceived by what they are purchasing. Air Methods continues to believe that the best way to solve for the patient financial burden is to go in-network with payers. We have led the industry in doing just that and have in network agreements with almost every major payer in every state and continue to work hard to get the big three payers – Aetna, United, and Cigna – into network as well.

The implications of the No Surprises Act make this Model Act even more important because:

• Memberships are largely obsolete starting January 2022, as they have been marketed to cover patients’ financial exposure to balance bills, which, again, will be prohibited in less than nine months. These products are now marketed to cover only copays and deductibles. One must ask how does this factor into the federal government’s prohibition on the routine waiving of copays and deductibles under the False Claims Act, Anti-Kickback Statute, and Civil Monetary Penalty Law?
• Given emergency air medical transport is always bookended by a continuum of care, any value to consumers in covering copays and deductibles is actually determined by the insurer, subject to when an air ambulance claim is submitted, and what amount of financial responsibility remains on a consumer’s policy.
• Memberships offer far less financial value to consumers now than they did previously since they only cover copays and deductibles.
• Companies that sell memberships believe these products operate above state law; however, states can, and do, regulate air ambulance membership subscriptions. Good examples of this are FL, NY, and most recently WV. Importantly, there are several areas of consumer protection for state regulators to consider:
  • Payment-to-cost ratio decreasing – will consumers be charged fair premiums?
  • Interaction of memberships with the patient’s main health insurance policies. How will regulators ensure that these products add financial value for the policyholder and are not merely duplicative coverage?
  • Sales of memberships to consumers who have no real need to purchase them. We already know that 35% or more of consumers who purchase these are Medicare beneficiaries. When comparing the data provided to NCOIL with data from NAIC and AHIP on the U.S. Medigap market, the largest membership product in the United States, AirMed Care Network, is technically the second-largest Medigap product sold in the U.S., second only to United Healthcare, but without any regulatory oversight at the state or federal level whatsoever. What about the additional consumers who truly will not have any out-of-pocket financial risk starting in January because of the No Surprises Act?
  • Because membership policies are completely unregulated, there is no state or federal oversight to prevent consumers from being taken advantage of in the case of being sold membership policies by fraudulent companies. Last time I spoke to the Committee, we discussed HeliMedic, which masquerades as an air ambulance provider and air carrier but doesn’t seem to actually exist. Yet you can google their website right now and buy a membership from them that claims to cover you and your family anywhere in the United States.
  • Confusing and deceptive practices buried within the fine print of memberships should be reviewed to determine if they are truly in the best practice of the policy holders. For example:
    • Disclosures for Medicaid and Medicare beneficiaries shifts the burden to the consumer to certify they are Medicaid beneficiaries. What about adding disclosures for the No Surprises Act?
    • Membership contracts sign away the consumer’s first lien rights so that any settlement received from auto or homeowners insurance must first go to pay the full billed charges of the air medical bill.
    • Terms & Conditions allow for auto-renewals in perpetuity without consent or refunds.
    • How will consumers that realize they can no longer be balanced billed next year be able get a refund after the No Surprises Act is enacted, and to which state agency do they go for recourse if they cannot get a refund?
    • Some of the policyholders have been so scared by the potential financial burden of a balance bill that they have delayed care to be transported by their membership provider in a medical emergency versus the closest and most appropriate provider.

Memberships are indemnity products.

• Copays and deductibles are set by a third party, the payer, not the provider.
• In fact, a January 6 handout entitled “HR 133/Membership Matters Talking Points,” GMR states: No air company can predict individual out-of-pocket costs as those are determined by insurance companies.
• Indemnifying the policyholder against costs determined and set by third-party entities is dispositive of the “insurance” question: air ambulance memberships engaging in this activity clearly fall within the business of insurance.
  • The data filed in Air Evac v. Dodrill in February 2021 shows that these products are pooling risk like an insurance product, not prepaying for services.
  • The patient cannot call an air ambulance and has no choice in the matter, for a membership to be considered prepayment, the consumer has to have a reasonable expectation that they will use the product.
  • Yet, you and I have a higher likelihood of dying of heart disease than we do of being transported by an air ambulance. Air Evac v. Dodrill showed similar utilization among consumers who had purchased an air ambulance membership. In this case, 0.2% of these individuals in West Virginia used their membership.
• There has been a lot of confusion about the recent Appeals Court decision in Guardian Flight v. Godfread in the 8th Circuit. State legislators and regulators have been told that this decision prohibits them from taking any action on regulating memberships because of the Airline Deregulation Act. However, this is not completely accurate. Guardian Flight found that a state law enacted “for the purpose of regulating the business of insurance” falls under the reverse preemption of the McCarran Ferguson Act, 15 U.S.C. § 1012(b). Hence, legislation like the proposed NCOIL Model Act on Air Ambulance Memberships, including the amendment before you today, are permissible and appropriate, ensuring meaningful consumer protections for air ambulance membership products.
• The proposed NCOIL Model Act, and the amendment before you, takes a targeted, narrow approach to appropriately regulate the business of insurance, and to protect consumers from predatory marketing and sales tactics.

If memberships are simply a prepaid service then they should be just that, and the economics should support it. However, after January 1, 2021 the only possible prepayment is for the copayment and deductible. It is important to remember that based on the timing of service or when the claim is filed that there may be no copay or deductible. Additionally, when the provider seeks reimbursement for these services from a third party, then they become a medigap product.

One final point to make is that there are much better ways to reduce the financial burden that a patient may face. At Air Methods our average out of pocket expense for all patients is less than $165. And in the case where an individual cannot afford to pay that amount we use specific financial information from the patient to qualify them for an appropriate discount.

We continue to support this proposed Model Act, and the amendment before you, as a way to give States a tool to help consumers, and to ensure that the coverage they are buying is not duplicative or deceptive. The proposed NCOIL Model Act takes a targeted, non-prohibitive approach to appropriately regulate the business of insurance, and to protect consumers from predatory marketing and sales tactics.

What is NCOIL?
NCOIL is the National Council of Insurance Legislators. From the NCOIL website:
NCOIL is a legislative organization comprised principally of legislators serving on state insurance and financial institutions committees around the nation. NCOIL writes Model Laws in insurance, works to both preserve the state jurisdiction over insurance as established by the McCarran-Ferguson Act seventy-four years ago and to serve as an educational forum for public policy makers and interested parties.
NCOIL works to:
• Educate state legislators on current and perennial insurance issues
• Help state legislators from different states interface effectively with each other
• Improve the quality of insurance regulation
• Assert the prerogative of legislators in making state policy when it comes to insurance
• Speak out on Congressional initiatives that attempt to encroach upon state primacy in overseeing insurance
NCOIL is an adamant, vocal opponent of any Congressional initiative that would deprive consumers of key state protections, preempt state laws that respond to unique insurance markets, threaten critical state premium tax revenue, and, in many cases, lead to cherry picking and fraud.

Materials used during Myers’ presentation:
PowerPoint Presentation
AMCN Brochure with Terms & Conditions